Kevin Carr: The vital connection between financial advisers and care homes

I recently wrote in these pages about the experience I’ve had this year with my dad moving into a care home, which is a sobering and at times shocking read for anyone, including financial advisers.

Dealing with the death of a parent can be deeply emotional and having been through it myself, words cannot underestimate the impact this can have on a family.

However, once the important matters are sorted, from a life admin perspective at least, it’s done. It’s over – and to an extent, the family can eventually start to move on.

However, dealing with a parent in a care home is ongoing – the paperwork, bureaucracy, reviews, costs, errors, delays… combined with the emotional challenges of visiting someone regularly who often doesn’t know who you are or where they are.

Now that he has been in the care home for a few months, I find myself reflecting on the journey and especially around the role of financial advisers, including all types of advisers – investment, protection, mortgage or otherwise.

Because if we are willing to discuss what happens financially when a client dies, why aren’t we discussing what happens if they live to 80 and lose capacity?

Every financial adviser, investment, protection or otherwise, should at least raise later-life planning with clients in their 40s and 50s

If we are taking a client’s mortgage into their 60 or 70s (or beyond), why aren’t we discussing what happens if they live to 80 and lose capacity?

If we are planning the investment strategy to ensure clients get the retirement they dream of, why aren’t we discussing what happens if they live to 80 and lose capacity?

Now, full disclosure: I spent many years as a mortgage and/or protection adviser when I was younger and did I mention this to clients? No. It wasn’t my job. I didn’t think of it. I didn’t know about it. And nobody told me to. Although nobody told me not to either.

A wise man recently said to me, “All advisers are later-life advisers, because whether they like it or not, these issues should be discussed regularly as part of the client relationship.”

I agree wholeheartedly.

Kevin Carr: My father, power of attorney & CQC

I’m not suggesting all advisers need to swot up on annuities and care home costs this weekend – there are plenty of later-life specialists you can team up with, and plenty has been written on that and signposting in other columns.

Refer to a solicitor for wills and LPAs. Refer to a later-life specialist adviser where appropriate. Refer to tax specialists for complex estate planning. And so on.

But, I would argue that every financial adviser, investment, protection or otherwise, should at least raise later-life planning with clients in their 40s and 50s, even if they are not qualified to give detailed advice in all areas.

By the time many clients reach their 70s or 80s, it is possible that mental capacity issues may already have arisen. By age 40–50, clients should have considered:

• A current will
• Lasting Powers of Attorney
• An understanding of their potential estate value and future IHT exposure
• Whether protection insurance has a role in estate planning
• How they might fund care later in life
• Who would help manage affairs if they became ill or lost capacity

So, let’s challenge ourselves.

If we are willing to discuss what happens when a client dies, are we also discussing what happens if they lose capacity (which, from personal experience, I can say can be far more difficult for the family to manage)?

While the detailed advice may sit with specialists, the responsibility to start the conversation comes earlier

Many families may not have thought about it. Some people will not want to raise it themselves and may welcome an intervention from the financial adviser.

Later-life planning does not need to be a specialist conversation. It can be part of the standard financial planning checklist. While the detailed advice may sit with specialists, the responsibility to start the conversation comes earlier.

“If something happened to you tomorrow, are you confident your wishes would be carried out exactly as you intend?”

“If you lost physical or mental capacity, who would you want to make financial, legal and healthcare decisions on your behalf?”

“How would you want your care to be funded if you needed help at home or residential care in later life?”

“What would happen to your family if you died unexpectedly, lost mental capacity, or needed long-term care tomorrow?”

Whatever happens, please do not leave later-life care decisions until a crisis occurs.

Kevin Carr is MD of Carr Consulting & Communications and director at Protection Review